Over the past few years, voluntary benefits have emerged as a way for employers to enhance their overall benefits package in an efficient and cost-effective manner. Most people are familiar with offerings such as dental, vision, life and disability insurance, but accident insurance is now emerging as one of the more popular voluntary benefits in the marketplace, primarily due to the increasing costs of medical expenses and employers’ need to shift more of that cost to the employee.
WHAT IS ACCIDENT INSURANCE?
This product is designed to pay a lump sum benefit directly to the insured for an accidental injury. Accidental injuries include dislocations, fractures, loss of limbs, burns, and disabilities or deaths due to accidents. The lump sum payment can be used to help defray the cost of out-of-pocket medical expenses associated with an accidental injury, such as doctor fees, copayments, deductibles, X-rays, crutches, wheelchairs, blood plasma, stitches and other emergency services. Accident insurance can cover an insured’s spouse and/or children. This offering is supplemental to any medical coverage, meaning that it is separate from any other coverage the insured has. As such, accident insurance can be purchased on its own or to fill a gap left by other coverage. The bi-weekly premium is about $8 for single coverage.
IMPACT ON HEALTH CARE
Accidents represent a much larger economic impact to both employees and employers beyond what is widely known. According to the National Safety Council, economic impact of these unintentional injuries amounted to $790 billion in 2013. These are costs that every individual and household pays, whether they are directly out of pocket, through higher prices for goods and services or through higher taxes.
Consider these statistics from the 2011 National Safety Council Injury Facts:
• In 2009, approximately one out of every eight Americans sought medical attention due to an accident.
• In 2008, about 27.9 million people were treated in hospital emergency departments.
• According to the latest final data (2007), unintentional injuries continued to be the fifth-leading cause of death. The 2009 estimate of 128,200 unintentional injury deaths is the highest on record.
Accident insurance has been the second-most popular voluntary benefit since 2002 (critical illness insurance is the most popular). By obtaining accident insurance, you can help your employees buffer some expenses related to their increasing out-of-pocket medical costs. This coverage is especially attractive to employees with children, as it provides affordable protection for the entire family.
As an added bonus, guaranteed issue underwriting is often available, providing opportunities for all employees to participate, even if they have pre-existing medical conditions which previously prevented them from qualifying for coverage.
Employees don’t have to answer any questions about their health – something employees could not get outside of their employer. Additionally, a rider can be added called “hospital admission” that covers a sickness or accident that requires hospitalization.
Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.